CAC 40: Holiday but not off work!

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Despite the public holiday nature of this Wednesday (November 1, All Saints’ Day), the Paris Stock Exchange will open under usual opening hours and trading conditions. If the session should be marked by the absence of a significant fringe of speakers, it is not the benchmarks, in particular statistics, which will be lacking, particularly on employment and industrial activity across the Atlantic. In addition, the Fed is completing a new meeting of its Monetary Policy Committee today.

The CAC 40 index recovered 0.89% to 6,885 points yesterday, continuing its pullback towards the symbolic threshold of 7,000 points, a threshold which had been broken without any care on October 18 and 19. In the immediate future, the French flagship index benefits from the effect of the publication, at the start of the week, of a slowdown in inflation, in the Euro Zone in general, and in France in particular, going from 4.9% to 4% in October.

“Overall, these data confirm the findings of previous months. The trend towards disinflation is well underway in France. However, disinflation will not be a long, quiet river and will take time. Inflation will probably remain close to 4 % over the coming months,” warn ING strategists.

Signals equivalent in their scope in Germany also allowed the market to regain some air over the last two sessions.

On the value side, Bouygues gained 4.2% following nine-month results that exceeded analysts’ expectations. Stellantis grew by 2.4% after reporting a turnover better than expected by analysts thanks to an improvement in sales volumes.

Conversely, Thales fell by 2.4%, the group having reported slightly disappointing order intake in the eyes of the market.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session in the green, like the Dow Jones (+0.38% to 33,052 points) or the Nasdaq Composite (-0 .48% at 12,851 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, closed up 0.65% at 4,193 points.

An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0570. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $81.50.

On the agenda this Wednesday, to follow as a priority, across the Atlantic, the results of the survey by the human resources firm ADP at 1:15 p.m., the manufacturing ISM at 3:00 p.m., new job offers (JOLTS) also at 3:00 p.m., as well as the outcome of the Fed’s FOMC (decision at 7:00 p.m. and press conference at 7:30 p.m.). A status quo on the remuneration of Fed Funds is almost certain, the option having a probability of almost 98% according to the CME FedWatch tool.

KEY GRAPHIC ELEMENTS

The technical situation on the CAC 40 is quite readable: the index came out of a flattened diamond (diamond) pattern on September 25, which pushed the market into the red. Two pullbacks later, it was the turn of the symbolic threshold of 7,000 points to suffer the threat of prices, a threat put into effect on October 18, 19 and 20 in increasing trading volumes. Since then, a figure of congestion has emerged, under a 20-day moving average (in dark blue) which melts below 7,000 points.

FORECAST

Considering the key graphical factors that we have mentioned, our opinion is positive on the CAC 40 index in the short term.

This bullish scenario is valid as long as the CAC 40 index is trading above support at 6796.00 points.

Hourly graph

Daily Data Chart